Hospices Under the Microscope: Are You Prepared for ZPICs?

Transcription

1 Chubb Health Care Webinar April 2, 2013 Hospices Under the Microscope: Are You Prepared for ZPICs? Paula G. Sanders, Esquire Principal & Chair Health Care Practice Post & Schell, PC

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3 Objectives Understand how ZPICs differ from other audits Discuss how a ZPIC audit unfolds Evaluate your risks and potential exposures Consider best practices to be prepared 3

4 Medicare Integrity Programs Regional Home Health Intermediary (RHHI) Medicare Administrative Contractors (MACs) (Replacing fiscal intermediaries and carriers) Comprehensive Error Rate Testing (CERTs) 4

5 Medicare Integrity Programs Recovery Audit Contractors (RACs) Program Safeguard Contractors (PSCs) Zone Program Integrity Contractors (ZPICs) Medicare Prescription Drug Integrity Contractors (MEDICs) Quality Improvement Organizations (QIOs) 5

6 Fraud or Abuse? Fraud: intentional deception or misrepresentation of facts for purpose of gaining an otherwise unauthorized benefit Abuse: actions that are inconsistent with accepted, sound medical or business practices Directly or indirectly results in unnecessary costs 6

7 Zone Program Integrity Contractors (ZPICs) Consolidation of PSCs and MEDICs Coordination of claims processing and benefit integrity activities Ensure integrity of ALL Medicare-related claims Parts A, B, C, D, Home Health, DME, Hospice and coordination of Medi-Medi data matches Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: 7

8 ZPIC Function: Identify FRAUD Primary goal: investigate instances of suspected fraud, waste and abuse NOT RANDOM Identify need for CMS administrative actions Payment suspensions, prepayment edits or auto-denial edits Refer to law enforcement for possible civil or criminal prosecution 8

9 ZPIC Responsibilities Regional Medicare data analysis Fraud case development Fraud complaint processing & resolution Provider education related to fraud investigations Ability to initiate payment suspensions and provider exclusions Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: 9

10 Possible Sources of ZPIC Cases Referrals from MACs Suspected fraudulent or abusive situations or patterns (data analysis) Complaints from beneficiaries, other providers or whistleblowers Office of Inspector General (OIG) Hotline CMS Fraud Alerts OIG Reports 10

11 ZPIC Investigative Authority Not required to give notice Request medical records & documentation No limit to record requests No defined look-back period Conduct on-site visits and interviews of employees & beneficiaries Use probe sampling, statistical sampling & extrapolation 11

12 Use of Statistical Sampling for Overpayment Estimation A Medicare contractor may not use extrapolation to determine overpayment amounts.... unless... There is a sustained or high level of payment error; or Documented educational intervention has failed to correct the payment error 42 U.S.C. 1395ddd(f)(3) 12

13 Extrapolation No CMS guidance regarding high error rate ZPIC must give notice of extrapolation unless part of law enforcement investigation Extrapolate findings of sample to universe of claims for specified period Result: substantial overpayment determinations 13

14 ZPIC Sanction Authority Suspend or withhold payments Determine & collect overpayments Refer for exclusion from Medicare Refer cases to law enforcement Grounds for possible revocation Violation of provider agreement Being uncooperative during on-site visit 14

15 Challenging ZPIC Findings No appeal of payment suspensions Appeal overpayment demands through Medicare Administrative Appeal process Five levels of appeal Lengthy process May only halt recoupment through second level Significant interest rate applies 15

16 ZPIC Appeal Levels 1. Redetermination: MAC 2. Reconsideration: Qualified Independent Contractor (QIC) 3. Request for Hearing: Administrative Law Judge (ALJ) 4. Review of ALJ Decision: Medicare Appeals Council (MAC) 5. Judicial Review: Federal District Court 16

17 Government Focus Areas 17

18 Target Areas for Hospice Claims Election statements Certifications of terminal illness Patients ineligible for hospice care Eligibility and long lengths of stay Residence of patients: nursing homes (SNFs), assisted living facilities (ALFs), boarding homes Terminal diagnosis Kickbacks 18

19 Target Areas for Hospice Claims Poor documentation Inappropriate general inpatient care claims Inappropriate continuous care claims Duplicate drug claims Overlapping Part A claims (hospital, SNF) Fewer services than in plan of care 19

20 Target Areas: Hospice Utilization in SNFs (OIG Work Plan 2011) Data mining: Hospice Medicare A claims and MDS Characteristics of nursing facilities with high hospice utilization Prior report: 82% of SNF/hospice claims did not meet coverage requirements Incentives to admit patients likely to have long stays Tip: Examine business relations and marketing practices 20

21 Case Studies 21

22 ZPIC Letters Identifies ZPIC authority to conduct reviews of activities of providers including medical utilization review and fraud review Please return the requested information within (15)(30) days. Failure to comply may result in exclusion and/or suspension of payment [without notice], payment denial or declaration of overpayment. 22

23 ZPIC Letters--Extrapolation Please note failure to furnish this information shall result in the cancellation of all relevant claims.... Any overpayment determined by us may be projected by extrapolating from the actual overpayment to the entire universe. 23

24 ZPIC Letters: Notice of On-Site Visit Hand-delivered at time of visit On [Date] an on-site inspection and interviews of facility staff will be conducted by six (6) representatives from this office. At that time you will be asked to produce approximately thirty-six (36) patients records (Attachment A) and financial records (Attachment B). 24

25 Types of Information Requested All contracts and agreements with physicians, pharmacies, SNFs, ALFs, boarding homes List of all current and former employees Name, job title, date of birth, address, phone number, date of hire/termination or resignation List of all practice locations Hours, address and phone number 25

26 Types of Information Requested 1099 or W2 statements for owners, managers, directors and medical directors Payrolls: independent contractors and regular employees with title and contact info 1099 statements for vendors Policies and procedures Board meeting minutes directors or trustees 26

27 Types of Information Requested Check registers, wire transfer registers, financial ledgers Name and number of Compliance Officer Contracts for accounting, management, financial consulting, bookkeeping On the cover letter, please list the name and contact information for the person responsible for providing the above. 27

28 Types of Patient Information Requested Medical records for beneficiaries and dates of service as shown on attached spreadsheet Unduplicated list of beneficiaries Place of service address, phone number, dates of admission & death, discharge or revocation, primary nurse 28

29 Time Frames for Submitting Documents Prepayment review: 30 calendar days of request, no extensions Claims denied if documents not received by day 45 Post payment review: 30 calendar days of request, extensions discretionary 29

30 Hypothetical Case Study: Hospice for the Debilitated Primary diagnosis for 69% of patients is debility, highest in the region ZPIC identifies this as an outlier ZPIC requests 30 medical records Files sent do not contain signed notice of election forms (100% error rate) ZPIC identifies this as high level of payment error 30

31 Hypothetical Case Study: Hospice for the Debilitated 100% error rate for sample claims reviewed: $51, High error rate allows ZPIC to extrapolate to all claims that had been paid during period under review $51, becomes $2,467,

32 Hypothetical Case Study: Hospice for the Debilitated--#1 (no regulatory counsel) Hospice discovers that medical records clerk did not copy the notices of election Records were sent but not copied Hospice signed certification statement attesting to completeness of document production Called regulatory counsel upon notice of overpayment Outcome? 32

33 Hypothetical Case Study: Hospice for the Debilitated--#2 (with regulatory counsel) Hospice bate-stamped all documents and did not sign certification statement Upon review of ZPIC findings, hospice rereviews documents sent and locates 15 of the missing elections, as well as 10 more that were not sent (will be addressed on appeal) Error rate decreases from 100% to 50% $2,467, reduced to $1,237,

34 Possible Appeal Issues Clinical findings: medical necessity determinations; inconsistency with LCDs or NCDs (support with experts) Discrepancies in denial codes Procedural attacks Documents were provided but ignored Extrapolation methodology wrong, inaccurate, improper 34

35 Possible Appeal Issues Accuracy of sample selection, methodology and error rate (was sample representative of claims) Validity of universe (e.g., did ZPIC draw claims based only on length of stay >180 days but extrapolate against all claims submitted during period under review) 35

36 San Diego Hospice & Palliative Care: ZPIC Audit February 2011 Notice of PSC/ZPIC audit Shortly after notification, 8 investigators arrive and investigate for five days Take sampling of patient documents Require Hospice to submit documentation for every patient admitted 36

37 San Diego Hospice & Palliative Care: ZPIC Audit Placed on prepayment review Audit continues after prepayment suspension is lifted Feb 4, 2013: files for bankruptcy anticipating multi-million dollar payback Feb. 12, 2013: announces closure Feb. 20, 2013: whistleblower lawsuit unsealed 37

38 San Diego Hospice & Palliative Care (per False Claims Act Complaint) Employee expresses concerns about admission and retention of non-terminally ill patients in 2009 and 2010 Jan. 10, employee terminated for disagreement with philosophy of admission criteria Feb employee contacts state Dept. of Human Services and is encouraged to submit anonymous letter 38

39 San Diego Hospice & Palliative Care (per False Claims Act Complaint) March 24, ex-employee submits letter Jan ex-employee interviewed by FBI Dec. 3, ex-employee files whistleblower suit Feb. 20, whistleblower suit unsealed 39

40 San Diego Hospice: Whistleblower Allegations Open Access Policy - Falsification of records to allow patients to qualify for hospice care Admission of patients wishing to prolong life Pressure to retain patients whose conditions had improved Creative manipulation of patient files to meet federal and state regulations 40

41 San Diego Hospice and Palliative Care During audit, Hospice begins closer scrutiny of patient eligibility Large number discharged from service Staff reduced Approximately 40% of patients at issue 41

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43 Compliance Suggestions Know your operations, your risks & fraud and abuse insurance coverage terms 43

44 Be Prepared: It is When, Not If Expect to receive governmental contact Designate a point person to coordinate response Who will receive letters/calls? Who will send it up? Who will be responsible for ensuring timely response? 44

45 Be Prepared: It is When, Not If Assemble a facility and/or organization response team how will you communicate internally and with whom? Post a sample copy of request letters with instructions about where each type of letter should go Alert front desk/staff responsible for answering phone 45

46 Be Prepared: It is When, Not If Train, train, train..... Will staff know what to do if an investigator wants to interview them? What are their rights? Your rights? 46

47 If You Receive A Notification Letter... Notify your attorney/compliance team Review what has been requested Gather documents, review and ask for extension if needed Scan and number everything produced Include cover letter itemizing contents Send certified mail Prepare for appeals 47

48 Resources And Useful Information 48

49 ZPICs and Websites ZPIC Website ZONE STATES IN ZONE Safeguard Services AdvanceMed 1 California, Hawaii, Nevada, American Samoa, Guam, and the Mariana Islands 2 Washington, Oregon, Idaho, Utah, Arizona, Wyoming, Montana, North Dakota, South Dakota, Nebraska, Kansas, Iowa, Missouri, Alaska Cahaba 3 Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, Kentucky Health Integrity 4 Colorado, New Mexico, Texas, and Oklahoma AdvanceMed 5 Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Georgia, North Carolina, South Carolina, Virginia, West Virginia Under Protest 6 Pennsylvania, New York, Delaware, Maryland, D.C., New Jersey, Massachusetts, New Hampshire, Vermont, Maine, Rhode Island, Connecticut Safeguard Services Florida, Puerto Rico, Virgin Islands 49

50 QUESTIONS???? Paula G. Sanders, Esquire (717) Post & Schell, P.C. 17 North Second Street, 12 th Floor Harrisburg, PA